The World Bank estimates that $180bn (£112bn) of water infrastructure investment is needed each year until 2030 to meet fresh-water demand.

Renewed corporate activity, a strong performance from water stocks and an increasing interest in water innovation from cleantech venture capitalists, which have historically favoured the energy and waste sectors, suggests the world is catching on. But, the water industry remains conservative.

Its lack of innovation and technology uptake was one of the key themes to emerge from a report published this week by the London Environmental Investment Forum to coincide with a conference at the London Stock Exchange.

In the report, venture capital (VC) investor Emerald Technology Ventures describes this "technical gap" as "a very attractive setting from a VC perspective", but says the challenge "is picking the ones that fit the VC model".

But, the greater the returns the greater the risk, and according to Israel Cleantech Ventures "many VCs are deterred from investing in the sector as a result".

"People don't like experimentation with their water," says Icos Capital.

This sentiment may present a challenging environment for entrepreneurs seeking capital, but it is still spurring some exciting technology developments, particularly in waste water treatment and smart management of water networks.

"We expect a main driver for growth in each of these areas will be the growing awareness of the water-energy nexus – the need to save energy costs across the water industry," says Israel Cleantech.

And it's the companies emerging with these technologies that are attracting interest from investors and industry alike.

High energy use and leakage rates are major problems for water suppliers. Zeropex, a Norwegian company, has developed a hydro micro gen technology which harvests the energy produced from a controlled reduction in water pressure and converts it to electricity, which can then be used by the utility or exported to the grid. A UK utility is already trialling it.

Icos Capital has invested in Dutch Rainmaker, a company combining windmill and cooling technologies to produce water from air.

In the UK, there's Algaecytes, a company using algae to produce clean water from waste water, among other things.

And although, as with many other sectors, it's the developing world that's taking the leading role in adopting innovative technologies such as these, they do have global application.

As Israel Cleantech points out, "there are very few geographic locations around the world that are free of water concerns of some scale".

Sounds like oil to me...

Tom Whitehouse is chairman of the London Environmental Investment Forum